Mark Berman: Astros offering Carlos Correa a 5 year/160 million dollar contract

If Crane is eventually willing to offer 7 years, 245-250M or 8 years, 280M, no state income tax really helps the Astros.

For comparison, if Correa signs with Detroit, he only has roughly 12 AL games (3 in Texas, Houston, Seattle and Tampa) where he pays no income tax on his games, and he could get three more during the years the AL Central plays the NL East (Miami). At best, he pays taxes on 147 games. At worst, he pays them on 150 games.

In New York and Boston, he pays state income tax or Canada’s tax rate on roughly 144 of his games (every division game other than 9 in Tampa, 3 in Texas, 3 in Seattle and 3 in Houston). He could get three or four more tax free games in Miami some years.

In Houston, he gets 102 or 103 tax free games every year, and if the Astros play in Miami, make it 105 or 106.

Most of Detroit’s games are in states with fairly low state income taxes (4-5%), so the difference is only about 500K per year for American League games. Pennsylvania’s tax rate is only 3.07%, so the difference is about 300-400K.

For Boston, it’s about 800K per year for all American League games. For teams in California or New York, the difference is about 1.5-2M.

 

Add the Mariners games to the tax-free games, Washington doesn’t have a SIT either.
Also, I could be wrong, but I don’t think taxes are done by what state the games are played. I think they pay the same rate for the whole season, because the income is, say, “Texas originating” if the player plays for the Astros, right?

 

Nope, most states have jock taxes which means they collect taxes when visiting players come to play.

https://en.wikipedia.org/wiki/Jock_tax

 

With Verlander re-signing,I think it probably takes the Astros out of true contention to re-sign Carlos Correa.

But it’s gonna depend on Crane. I’m sure Click will want him back as it would make his job easier. But does Crane want to jeopardize his franchise’s future for the next 10 years if things don’t stay rosy for the duration of the contract?

It’s not my money, but as a fan of the Astros I’d say Correa is awesome, but in baseball one man does not make a team if his salary occupies the majority of the salary budget within the cap. There are 25 elite level athletes to pay, and they all have egos thinking they deserve more money.

 

I agree. I will be beyond surprised if he gets a 10 year 341 million contract but the Rangers have done that before.
I do believe he will get a 6-7 year deal worth 35 per season.

 

I don’t think Click wants Correa back at anywhere near the price Correa is asking for. If the Astros sign Correa it will be because Crane directed Click to make the deal. In fact it wouldn’t surprise me at all if Click was giving strong guidance to Crane not to go anywhere near Correa’s asking price.

 

Correa's contract wouldn't occupy a majority of the salary budget - he'd get basically what Verlander got last year (low $30's) or what Bregman will get in the next few years ($30MM). Practically speaking, the Astros can afford Correa without a problem. With adding Verlander, they can probably trade Odorizzi and free up a bit of money there - they need to be starting their young guys anyway. The only real question is the longer-term risk - its not a question of 2022-2026 or whatever. It's whether they want to pay him in 2027-2030+. I'd argue it's worth it because you're getting excellent value now, when you know the team is in contention. The only scenario you're hampered down the line is if ALL of the following are true:

* Baseball salaries don't keep going up (unlike the whole history of baseball)
* Correa gets worse (possible/likely)
* The Astros are contenders 5+ years from now (who knows)
* Correa is completely untradable, even if the Astros eat part of the money

If Correa stays good, if the Astros are no longer elite, if salaries keep inflating, or if the Astros can trade him and pay maybe 30-50% of his salary for those out years, Correa's deal won't be a restrictive burden down the line. That seems like a good risk to take to maximize the next 4-5 years to me. But as you mentioned, it's not our money. Regardless of the rest, I would just simply guess than in 7-10 years, a $30MM salary won't be anywhere near the top of the salary market.

 

I don’t think any team is going near the current asking price. We do know he is looking for the largest deal that is available though.

The (small) chance he resigns with the Astros is really dependent on what the market actually looks like for the best SS available right now. I don’t think it’s 10Y/340M. It’s also not 5Y/160M. If it’s closer to the former, he’s gone. If it’s closer to the latter he’s staying. There is a lot of room in between. Theoretically, Correa should be more valuable to the Astros right now than most other teams. They need a SS, they are in a championship contention window, they have the money, and he brings off the field value because of his history with Houston. Every team in baseball is getting smarter about avoiding risky contracts and over spending. So in some ways the Astros should be setting the market.

Having said all that, I think another team will still be willing to spend more than the Astros even if the Astros should be the team willing to spend the most.

 

Maybe the Rangers overpay. I don't think Detroit would, but you never know.

If Correa really wants that deal, and is willing to be a Ranger and go through another 3-4 years of rebuilding... let him make a go of it.

 

Thanks for the correction on the Mariners. That only improves things for the Astros, as they would have 102-103 tax-free games every season. Same for the Rangers. Every other team only gets three or four more tax-free games.

Someone already answered your second point, but athletes’ incomes are taxed for every game played in states where a state income tax is present.

 

to add, we will be rebuilding in 7 years so our overall team salary will probably be quite low.

 

I hope the Ynks blow there wallet on him, hes not worth that type of money. The 5 year 160 is enough for him, and astros really need to move on find better pitching now with that money.

 

Why are people continuing to harp on more pitching? They're in a great cost controlled position there... and just hedged their bets with the signing of Verlander this year and the extension of McCullers last year.

If you're going to offer plenty of years and $$$ to anybody... it needs to be the everyday players. And not necessarily saying 10 years.

 

I don’t get it, either.

You have Verlander, McCullers, Garcia, Valdez, Urquidy, Odorizzi and Javier as starting options.

If the Astros don’t feel like Javier can handle a one-inning relief role provided they clearly define his role this offseason (splitting the 6th inning with Blake Taylor depending on matchups), they likely will find a suitor for Odorizzi and trade his $8M salary.

 

Honest question - So we "aggressively" pursue Marte, is this independent of signing CC even with the thought of the signing CC to a "poison pill" 7-8 year offer (hypothetically) or has that ship sailed since we signed JV?

 

It is likely that signing Verlander means no Correa.

 

I doubt that. Verlander and Greinke made, what? $68MM last year?

Verlander ($25MM) + Correa (~$35MM) would not equal or surpass $68MM in '22.

 

Look at the total payroll projection. Houston has ~$30M remaining and they need more than 1 player.

 

Fairly certain they made Correa's offer along with whatever they eventually planned on giving Verlander... in a vacuum.

They can add more years to Correa's, but that won't impact next year's total payroll.

 

Verlander and Greinke made $57.7M last season. 33M for JV and 24.7M for Greinke (Arizona paid 10.3M of his 35M).

The Astros can dump Odorizzi’s 8M fairly easily, and if push came to shove, they could non-tender Diaz or trade him after accepting arbitration to free up 12-13M, provided they know Correa is coming back. They would have to attach a prospect to dump Baez’s 5.5M, but they could do that, too.